The Zambian government has entered a deal with its foreign lenders to restructure loans totalling $6.3 billion.
The agreement covers loans from China, France, the United Kingdom, South Africa, Israel and India.
China is Zambia’s biggest creditor, with the Asian country owed $4.1 billion by the southern Africa nation.
The deal was revealed by the French government on the sidelines of a global finance summit in Paris held on Thursday. A new repayment plan is expected to be announced soon, AP news agency reports.
The Zambian deal now sets a roadmap for foreign creditors on how they will handle other nations seeking a similar arrangement.
IMF welcomes deal
The International Monetary Fund (IMF) approved the deal, meaning it’s going to allow Zambia to receive more financing from the institution, the French government said.
A representative from the IMF did not immediately respond to AP’s request for comment.
The Zambia deal came at a summit with more than 50 world leaders, financial experts and activists to discuss ways of reforming a global financial system to help developing nations reeling under debt.
'Journey towards recovery'
Zambian President Hakainde Hichilema has termed the deal “a significant milestone in our journey towards economic recovery and growth.”
He said on Twitter: “On behalf of the people of Zambia, I thank our official creditors for their continued engagement and support.”
Zambia, Africa’s biggest copper producer, became the continent’s first Covid-era sovereign nation to default on loan obligations, when it failed to make a $42.5 million bond payment in November 2020.
The debt has prevented the country from developing economically. Experts say such prolonged debt crises can send nations deeper into poverty.
At least 14 African presidents are in Paris for the summit, with calls for a review of lending formula by major creditors, including the IMF and World Bank, dominating the talks.
